The CWU Postal Executive has unanimously endorsed Rebuilding Royal Mail part two – an agreement that includes a three-year settlement on pay and improvements to terms and conditions. This agreement builds on the original EP Group/CWU agreement of December 2024.
With EP Group now the sole owners of Royal Mail Group this agreement is their first major test. If we cannot rebuild trust in the workplace, we cannot rebuild Royal Mail.
We have worked closely with EP Group and Royal Mail in recent weeks to focus on an agreement that will signal a complete ethos change from the company.
We are pleased to confirm:
– The outcome of part two of Rebuilding Royal Mail is entirely in line with part one – this is crucial against the background of the previous Board and senior management team breaking so many agreements.
– Both parties have agreed to decouple the link between pay and USO reform – firstly our members deserve a straightforward pay deal after such a challenging period but also, any USO reform must stand on its own merits and be subject to a separate vote of our members. This demonstrates the company are committed to getting this right.
– In line with the EP/CWU agreement of the 18th December 2024, we have also agreed ongoing negotiations to resolve the remaining outstanding issues within the timeframe of the original agreement.
The terms of this agreement cover all CWU grade employees in Royal Mail Group.
Pay
These negotiations have been extremely complex because there are so many challenging factors*-* the new ownership of the company, the uncertainty regarding USO reforms and the financial situation of Royal Mail Group.
We also had to determine whether a one-year pay deal or a longer-term settlement was in the interest of our members. Firstly, the commitment to a long-term agreement was in part one of the Rebuilding Royal Mail agreement. If we are to ask the employer to abide by agreements, it is important we do the same. More importantly, after so much instability, this is an opportunity to deliver certainty for our members on pay.
Year One – 4.2% pay rise – flowing through to all elements of pay, overtime and scheduled attendance. Fully backdated to 1st April 2025.
Year Two and Three – Inflation (CPI) for both years, subject to reopener clauses. However, if CPI is less than 2% in either year, employees will receive a minimum of 2%. If inflation is above 3% in either year, both parties can trigger a reopener clause.
The three year pay settlement will ensure that postal workers pay will match or rise above inflation for the next three years.
Additional Earnings Opportunities
For too long now, any additional earnings opportunities from the company have been unrealistic, ill thought-out and all about sacrificing quality of service. However, we believe EP Group have a different approach to this and want postal workers to be able to make additional earnings.
– We have agreed with EP Group that we will trial and implement a new incentive scheme, which will give all employees a realistic chance of additional earnings.
– We are also finalising the terms of the Employee Collective Benefit Trust – 10% of any dividend will be due to our members once the company returns to profit.
– The employer has committed to offering more genuine opportunities for overtime and scheduled attendance ahead of agency/casual workers.
Improved Voluntary Redundancy Terms
We have agreed an improved VR settlement which moved the maximum entitlement to 52 weeks and gives employees the chance to accelerate through the ready reckoner at a greater pace to give more individuals the chance to hit the maximum entitlement.
Reducing Reliance on Agency Workers
For the first time, Royal Mail have agreed a serious set of measures that will allow us to monitor, reduce and replace agency workers with CWU grade workers. Options will include increasing contractual hours of permanent staff and introducing regular overtime and scheduled attendance.
The Next Steps
In line with the CWU/EP Group agreement of December 2024 we have reiterated and recommitted to resolving a number of outstanding issues within the agreed timeframes.
Equalising New Entrants Terms and Conditions
In line with the EP/CWU agreement of the 18th December 2024, both parties have reaffirmed their commitment to ensuring there is a full agreement in place on the pathway to equalising new entrants’ terms and conditions. We have also been clear that any agreement on this must take into account the time that new entrants have already spent in employment with Royal Mail.
We could not have stronger words on this in our agreement as both parties confirmed their “absolute commitment” to equalisation.
We will agree the first step by September 2025.
We will agree the full plan by December 2025.
Ahead of these negotiations, it is vital that all new entrants join the CWU to further increase our bargaining power as we seek to deliver the most effective and speedy route to equalisation.
A Review of Scheduled Attendance and Overtime
We will review and conclude an agreement on improving scheduled attendance and overtime rates by December 2025 – this is in line with Rebuilding Royal Mail Group part one.
Sick Pay Arrangements – an improved agreement
In line with the terms of Rebuilding Royal Mail part one, we will conclude these negotiations and introduce an improved agreement by September 2025.
A New Growth and Investment Strategy
For the first time, we are negotiating with an employer who wants to have a serious debate on growing products and revenues and is prepared to engage frontline employees on this. By December 2025 this strategy will be in place and it will give us the opportunity to genuinely shape the future of Royal Mail and our members jobs.
Employee and Industrial Relations
The reset starts now. This agreement provides an excellent platform for improving employee and industrial relations because it is clear that both parties have worked in line with the part one document during these negotiations.
However, we know the true test will be at local level. What will now follow is a series of actions that will be focused on a whole new ethos for the company with positive change in the workplace at its heart.
USO Reform
Decoupling USO from pay is a major moment as it demonstrates the clear will and need to get it right. We have to acknowledge that it also represents a different and more positive approach from the company as we look to rebuild trust at all levels.
The CWU are committed to the principle of USO reform. Change is necessary to grow the business and protect jobs. But that change has to be done in the right way, it has to restore quality of service and it has to deliver benefits for CWU members.
There will now be separate negotiations on USO reform which both parties aim to conclude with an agreement by the 18th July- subject to any announcement by Ofcom.
We are fully aware of how unsettling and counter-productive Royal Mail’s approach to the USO has been up to this point – with many offices reporting frame changes and managers reportedly stating dates for the introduction of change with or without an agreement from the union.
In addition, the early results from the pilot offices have been mixed.
CWU members can be reassured by the commitments we have gained from this agreement on the approach to USO reform:
– There will be a separate national agreement on USO reform – there will be no deployment beyond the pilot offices until this is in place.
– There will be no full deployment of USO reform until all issues from the pilot offices are resolved.
– Any agreement will set out a revised and more pragmatic approach to deployment, taking full account of the lessons learned from the pilot sites.
Summary
This is a pivotal moment in the history of Royal Mail. It builds upon the groundbreaking agreement reached between EP Group, the Government and the CWU last December and it is crucial that all members, reps and branches understand the link between the two agreements. These two agreements offer everyone the chance to move on from the most bitter dispute in the history of the company and the damaging managerial actions that have continued since.
There are still many challenges that need to be resolved but the Postal Executive believe that under the ownership of EP Group, Royal Mail are finally starting to negotiate in good faith.
Ultimately, the change of approach we have seen nationally will filter to where it matters – in the workplace.
We ask all members to fully read both part one and part two of the Rebuilding Royal Mail agreements. You can find links to both agreements below.
We will embark on an extensive communications and engagement plan now which will include reps briefings, video, live sessions, podcasts and more. We will then hold a member’s ballot and recommend members vote YES to endorse the Rebuilding Royal Mail agreements, parts one and two.
Thank you for your patience and support.
Martin Walsh
Deputy General Secretary Postal
Dave Ward
General Secretary